TIUMSACTIONS OF SECTION F, 7o7 



small savings; llioy have done mucli to put an end to the practice of giving- and 

 taking long credit ; they have done as much as in them lies to ensure the purity 

 of commodities ; they have discountenanced (though, perhaps, not with all the 

 success that might have been hoped for) the practice of taking commissions and 

 commercial bribery generally; they have raised the standard of comfort and have 

 helped many members to obtain the coveted possession of a house of their ovpn ; 

 they have devoted a share of their profits to educational purposes with excellent 

 results. Some of the productive societies, by the practice of giving a bonus to 

 labour, have improved the economic position of the workman and contributed to 

 the efficiency of his work. On the other hand, co-operative societies generally have 

 not been so successful as was expected in realising some of the aspirations of the 

 founders of co-operation ; commercial failure has not been unknown among them ; 

 losses have occurred, though the simple organisation of the societies has made it 

 easy to deal with them by adjustments of the capital account ; they have not always 

 had the best of managers, and have sometimes failed to give their confidence 

 where it was deserved, and given it where it was not. In many places they have 

 had to contend with opposition from the traders to whose business and profits 

 their success was unfavourable. Taking all things into consideration, the progresa 

 they have made is surprising. 



Comparing the returns for the United Kingdom for the years ending Decem- 

 ber 31, 1891, and December 31, 1901, the increase in number of societies was from 

 ] ,597 to 2,175 ; in number of members from 1,136,907 to 1,929,628 ; in amount of 

 funds from 16,545,138/. to 40,824,660/. 



It has been observed that the Co-operative Societies are largely undertaking 

 the work of providing houses for their members ; and to that it may be added that 

 the Friendly Societies are more and more tending to adopt the practice of lending 

 money to members on mortgage as one of the most remunerative forms of invest- 

 ment open to them. The Building Societies, which were established for that 

 purpose only, are still carrying on the same work, and the combined operation of 

 all three ought to produce a material effect ou the prosperity and well-being of 

 the industrial population. Building Societies alone advance as much as 9,000,000/. 

 a year on mortgage. 



Building Societies have passed through a crisis. The incorporated societies 

 reached their highest point of prosperity in 1887, when their capital amounted to 

 fifty -four millions ; by 1894 it had fallen to below forty-three millions. The Building 

 Societies Act, 1894, required of societies a fuller disclosure of the real state of their 

 afiairs than had previouslj^ been called for. The result was to show that, apart 

 from the special scandal caused by the fraudulent proceedings of the Liberator 

 Society, there were hitherto undisclosed elements of weakness in the management of 

 Building Societies that justified the withdrawal of the public confidence that had 

 been reposed in them. The properties in possession before the passing of the Act 

 of 1894 were not less than 7,500,000/. ; they are now less than 3,000,000/. This 

 points to the fact that the early prosperity of Building Societies had led to the 

 establishment of more societies thau the public demand called for, with the con- 

 sequences that societies competed against each other, and that in the stress of 

 competition and the anxiety to do business they accepted unsatisfactory securities, 

 which must lead to loss upon realisation. From this point of view the effect of 

 the Act of 1S94 has been wholly salutary. Year after year the societies have 

 reduced their properties in possession. The evils which they dreaded from the 

 disclosure of the facts have not arisen. At this day it may be said that the 

 societies as a whole have regained the position they held iu public confidence, for 

 the members now know the worst. I'hey know, too, that where the blight of 

 properties in possession still infests the business the managers are resolutely 

 endeavouring to diminish its effect. 



I need hardly repeat what has so often been said of the economic value of a 

 sound Building Society. The man who by its means gets a stake in the country 

 mounts many steps on the social ladder. When he has paid off" the mortgage on 

 his own dwelling-house, and so liberated himself from the obligation to pay 

 principal aud iuterest, either iu the foxax of repayment annuity or of reut, what 



1903. • 3 5 



